How Apple’s brand stretch grows the core
Apple is a rare example of a brand that has used brand stretching to actually grow their core business, rather than undermine it. Check out the chart below showing how Mac computer sales have grown with the launch of the iPod and then iPhone.
In many cases, when a brand stretches into a new market the business forgets what made the brand famous, heading off on what I call a "brand ego trip" (e.g. Virgin Vodka/Jeans/Cola; easy Cinemas/Pizza/Deodorant; Lynx/Axe shaving. These brand extensions have limited added value so end up being small, diverting money and talent from the core
Here is how Apple have successfully stretched, where many brands have failed.
1. Brand extensions that drive core growth
The iPod, iPhone and iPad have all been hit products in their own right, bringing a new level to useability and design to their respective markets. In addition, they have introduced millions of people to the Apple operating system. Many of these new Apple customers have gone on to buy a Mac computer. They are attracted by the same levels of design and use-ability in the Mac, and also by the idea of having a seamless, smooth connection between their mobile devices and their computer.
Importantly, this is not a case of "image halo", which is often quoted as a benefit of brand stretching. No, Apple have benefited from a "usage halo", where the brand extensions have persuaded people about the usage benefits of buying the core Mac product.
One particular role the new extensions have driven core Mac sales is by acting as a magnet to draw people to the Apple store, both physical and online. Many of these retail customers will not have been Mac buyers, but end up being after visiting the store and trying out the computers.
3. Innovation applied back to the core
One of the less obvious ways brand stretching has benefited the core is through "innovation transfer". Apple have taken technology from the iPhone, such as "pinching" (using your fingers to expand or contract photos and images), and used to upgrade the Mac line of products. This makes the Mac better, but also creates another intuitive link between the iPhone/iPad and the Mac.
In conclusion, Apple's brand stretching has benefited the core Mac business not because of an image halo, but because of an integrated business model, where the new products directly drive the awareness and desireability of the core.